NEW YORK, USA

Positive momentum is setting the stage for a higher opening Tuesday on Wall Street amid another spate of corporate dealmaking.

Major indexes are edging up in pre-market trading after Toronto-Dominion Bank agreed to buy Chrysler Financial, the automaker’s old lending arm, from private equity firm Cerberus Capital Management LP for US$6.3 billion. Dutch chemicals company Royal DSM NV also says it plans to buy US biotech firm Martek Biosciences Corp for US$1.09 billion in cash.

A wave of positive momentum is also pushing stocks up. The Dow Jones industrial average has gained 4.3 per cent this month and the Standard & Poor’s 500 index has hit seven new annual highs since December 8.

Investors have been encouraged by improving economic data on retail sales, as well as policy changes such as the extension of Bush-era tax cuts. Mostly upbeat economic reports have also helped.

Software maker Adobe Systems Inc. on Monday posted earnings for its latest quarter that exceeded analyst expectations. The company also provided a rosy outlook, saying it expects to get a lift from the continuing e-book revolution as publishers adopt its software tools.

Another technology company, Jabil Circuit Inc., said Monday its fiscal first-quarter net income more than tripled on stronger revenue. Jabil, which makes parts for electronics and other technology companies, issued higher-than-expected guidance for the current quarter.

Used car dealership chain CarMax Inc. said Tuesday its fiscal third-quarter net income rose more than 10 per cent as an uncertain economy continued to boost sales of previously owned vehicles.

But ConAgra Foods Inc.’s second-quarter net income fell 16 per cent after consumers didn’t respond to the food maker’s promotions.

Nike Inc., the world’s largest athletic shoe maker, reports its fiscal second-quarter results after the stock market closes.

Ahead of the opening bell, Dow Jones industrial average futures are up 42, or 0.4 per cent, to 11,446. S&P 500 futures are up five, or 0.4 per cent, to 1,246.10. Nasdaq 100 futures are up seven, or 0.3 per cent, to 2,227.25.

Volume is expected to be light this week, since many traders are on vacation. Markets will be closed on Friday in observance of Christmas.

Bond prices are rising, pushing down yields. The yield on the 10-year Treasury note fell to 3.31 per cent from 3.35 per cent late Monday.

The euro fell after Portugal became the latest European country to be warned of a possible credit rating downgrade.

-AP

Photo: Wall Street

In this December 14, 2010 file photo, trader Richard Newman works on the floor of the New York Stock Exchange. (Photo: AP)